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Vilsack Speaks Out On FTAs

Ag secretary says that these agreements will be very important for agriculture.

Oct 20, 2011

Friday, President Obama is expected to sign the necessary legislation implementing the Free Trade Agreements with South Korea, Colombia and Panama. Secretary of Agriculture Tom Vilsack says we can expect more export records to be set.

"For agriculture it means $2.3 billion in additional exports," Vilsack said. "When you add that to what we are already doing you are seeing that we're going to be able to build on our record agricultural export year that we are having this year. That $2.3 billion of additional exports means more opportunities for farmers and ranchers to improve their bottom line but it also means more jobs; every billion dollars of sales generates about 8,400 jobs. We are looking at a little less than 20,000 new jobs plus improved income for farmers and ranchers."

The Secretary notes that agriculture is the only sector of the economy where we currently have a trade surplus.

"This year we anticipate and project it to be about $42 billion; to give you a sense of that it means we're selling $42 billion more than we're purchasing," Vilsack said. "That $42 billion is eight times what it was just five years ago so the surplus, the export activity, has grown dramatically in large part because of the productivity and the great work of American farmers, and producers and ranchers, but also because we at USDA are focused very strategically on trying to promote trade in the places we have potentially the most bang for our buck."

Vilsack says exports are not to blame for rising food costs at the grocery store and in restaurants. He says that export opportunities and trade basically allow great choices as well as competitive pricing. The increase of 4% to 5% in the cost of food can be partly attributed to the increase in energy prices.

"Farmers and ranchers only get 16, 17 cents of every food dollar, somebody else gets the other 84, 83 cents," Vilsack said. "The question is what do those other people do to get that 83 cents, 84 cents? Well they ship food, they process food, they package food, they refrigerate food, they store it, they sell it. All of those people have something in common and that is that they are pretty high energy users. So when oil costs go up you can anticipate and expect that there will be a corresponding increase in food prices."

Vilsack says that is one of the reasons it is so important to focus on alternative resources and alternative ways to produce our own fuel sources in the United States, such as biofuels.